Q&A with Michael Korsunsky, Chief Marketing Officer, MGID
Q: Why do you think ad blockers are so popular?
A: The use of ad blocking software grew 41 percent last year, with 198 million active users worldwide, according to a study conducted by Adobe and PageFair. Frankly speaking, there is good reason for this growing trend. Ads have become increasingly intrusive and misleading and often slow down site performance, load time and eat up mobile data, all contributing to a poor user experience. The issue is so bad, that the Interactive Advertising Bureau (IAB) recently delisted several ad formats that aren’t compliant with its new LEAN initiative focused on making ads “light, encrypted and AdChoices-enabled.
Q: What do you consider to be the biggest challenges for advertisers and publishers living in the ad blocking era?
A: To maintain a balanced ecosystem, advertisers need to effectively reach consumers and publishers need to preserve revenue streams to remain profitable.
Ad blocking software from companies like Adblock Plus, Purify and Crystal throw off this balance and threaten the free internet. Ad blocking violates the unwritten social contract under which paid advertising has supported free content for nearly a century. Advertising pays bills, creates jobs and provides content consumers want.
Q: Users of ad blockers may not think of their actions as theft, but if you are a web publisher losing revenue to the blocks, it certainly seems like your content is being stolen.
A: Convincing “honest” users that ad blocking is bad for the internet is an uphill battle, so many sites have started blocking the blockers. Just this week, The Atlantic announced that its readers will have to make a choice – disable ad blockers or pay a small fee to keep reading. If they refuse, they will no longer have access to the magazine’s content. Other publishers like The Washington Post, New York Times and Wall Street Journal have taken a more passive approach, politely asking those using ad blockers to turn them off.
It is clear that publishers increasingly feel that they could be facing a sudden death and cannot afford to continue to lose revenue from digital ads. Recently, the Newspaper Association of America, an industry association representing 2,000 newspapers, filed a federal complaint against the ad blocking industry alleging that software companies which enable users to block ads are misleading the public.
Q: Do you think ad blocking is economically sustainable? Why or why not?
A: Absolutely not. Publishers are struggling with dramatic changes that have eroded the traditional business model and ad revenues have dropped significantly. Print ads are in lower demand as people consume more online, and digital advertising is generally less lucrative than print. Continued use of ad blockers will put many publishers out of business and will result in higher paywall fees for consumers. In an effort to help publishers on the MGID network, we offer access to proprietary anti-adblocking technology that provides a 100 percent yield retention and is based on the IAB’s DEAL (Detect, Explain, Ask, and Lift or Limit) approach.
Q: Many in the industry consider ad blocking as a whole to be a racket – do you agree? If so, why, and who is responsible for it?
A: Yes; publishers and ad networks are undeniably being held hostage by ad blocking companies and consumers are losing out on content in the process.
The spread of unregulated ad blocking escalates aggressive advertising. The competition for the remaining inventory grows exponentially, so publishers and ad networks will do everything they can to win the attention of the user.
This behavior means more aggressive ad technologies and unethical delivery methods. Companies like Adblock Plus claim their technology allows consumers to enjoy the Web while only being exposed to “acceptable” ads, while simultaneously allowing publishers to continue generating revenue from ad sales. However, the ugly truth is that they are holding information delivery hostage to extort payment from the market at the expense of consumers.
Q: How has Google contributed to the ad blocking racket? Are there other major players in the space you also consider to be at fault here?
A: In 2011 Adblock Plus introduced its “whitelist” service, which it claims benefits the consumer and satisfies the needs of advertisers and publishers. Companies including Google, Microsoft, Amazon and Taboola have supported the growth of Adblock Plus and its unethical business practices for years by paying a ransom to have their ad supply whitelisted as “acceptable.”
Q: Looking ahead, what can the industry do as a whole to address – and hopefully eliminate – the threat that ad blocking poses?
A: It is absurd that any one for-profit company should have the authority to determine what is acceptable. Consumers should have the ability to define what they want to see, and publishers should be able to freely choose what they want to promote, based on a clear rating system and industry-wide regulations set by the IAB. The recent formation of The Coalition for Better Ads, which is working to develop global standards for online advertising based on consumer insights and member expertise, is a positive move forward.
The industry needs to stand united against the parasites that are ad blockers in an effort towards building and maintaining a sustainable, fair and clearly regulated advertising ecosystem.
About Michael Korsunsky, Chief Marketing Officer, MGID
Michael brings more than 16 years of marketing experience to MGID, the native performance network, where he currently serves as chief marketing officer. As CMO, Michael is responsible for overseeing the company’s global marketing strategy to elevate its status as a pioneer in native advertising and ensure continued growth worldwide. Prior to MGID, Michael served as senior vice president at AUDIENCEX, an adtech and marketing company that delivers end-to-end digital solutions for brands and agency partners. Before AUDIENCEX, Michael held executive positions with a variety of organizations including gaming publisher Legacy Interactive, intelligent traffic monetization platform T3Leads and global fashion e-commerce company Modnique. With a diverse blend of entrepreneurial and Fortune 500 company experience, Michael encompasses a unique combination of marketing analytics, behavioral targeting, technology and audience management skills. He also speaks four languages, including English, Spanish, Ukrainian and Russian.